What Are Personal Loans, And How Can They Benefit You? Personal loans are loans that can be used for personal needs are a requirement base for any work· You can get or choose personal loans at banks. Personal loans are very helpful for daily requirements.
What are personal loans?
The conventional wisdom has been that there are only three kinds of loans: Residential, commercial, and consumer.
It is true that there are only three loan types, but there are five other kinds of loans. These include the three conventional personal loan types and two others:
Helper loan – sometimes called “equity loan” or “small business loan” – which is for personal use only. · These loans come in many forms, such as the Frontline cash advance (sometimes called a “non-revolving credit” loan) and any one of the following:
The refinancing loan, in which the lender accepts the original mortgage or a new construction loan.
The asset purchase loan, in which the lender buys the primary asset of the borrower and transfers it to the new lender.
The benefits of personal loans
Interest rates are usually low – on average, less than 5% – and with some banks, you can even pay off the loan within a year.
Borrows tend to be short-term – a few months to a few years. You will usually be able to use the loan for the most common personal needs – a new appliance, new furniture, or a car.
Personal loans have fewer complications and paperwork than mortgages.
How to apply for a personal loan
1. With a Personal Loan, you can choose from a number of repayment options. The repayment options include the following: a) As little as 5% for payments less than 12 months; b) Up to 16.7% for payments over 12 months
2. You can choose how you want to repay the loan. The repayment options include the following: a) With a lump sum payment at the end of the loan term b) With a monthly payment over 6 months.
3. As you may know, you can use your own assets as collateral for a personal loan. However, you are not allowed to use your house, or any asset you own jointly with your spouse, or your primary residence, as collateral for a personal loan.
4. As you may have found out, you can get personal loans from different types of lenders. The types of lenders include the following: 1 and Banks 2.
Repayment of a personal loan
With a personal loan, you can choose to repay the loan in a number of different ways. The most common repayment options include monthly payments. You can also choose to pay off the loan in full over a number of years, or a combination of repayment periods.
Depending on the repayment option you choose, your repayment may be equal to or less than your original loan amount. Here are some of the other options you might choose if you choose to get a personal loan:
Pay it off over time. Instead of paying it off in full in one payment, you can spread your payments over a number of years. Or, if you choose to get a loan with a fixed interest rate, you might choose to pay more money at the beginning of the loan than at the end.
Personal loans are becoming very popular in the online world and many of the online lenders are also working on making it easier for clients to apply for them. The top choice for you is going to be determined by a number of factors such as fees, rates, processing time, etc. If you want to avail of a personal loan, then we recommend you to go through the personal loans offered by online lenders and focus on your requirements before you start the application process.